What exactly is OP coin? Why is it being used in the Ethereum ecosystem?

Where is the problem?

Ethereum is on fire, but it has a fatal flaw - it's expensive and slow. A transaction fee can cost dozens of dollars, and transactions have to queue for half a day. This is the “network congestion” issue of traditional public chains.

Optimism is here to cure this ailment. It is Ethereum's layer 2 scaling solution, using a technology called “Optimistic Rollup” to compress a large number of transactions together for settlement. The effect is: transaction speed increases by 10 to 100 times, and transaction fees drop to below 1%.

What cards does OP have

1. Surge in Throughput

• Ethereum Mainnet: 12-15 transactions per second
• OP Layer 2: Up to 4000 transactions per second
• The transaction fee has decreased from several dozen yuan to a few cents.

2. Developer Friendly

• Fully compatible with the Ethereum Virtual Machine (EVM)
• Existing Solidity code can be migrated without changes.
• Leading applications such as Uniswap and Aave have been deployed.

3. Inheriting Ethereum's Security

• The final settlement still relies on the Ethereum mainnet.
• Don't worry about the second layer being damaged - the mainnet has it covered.

Why It Is Worth Paying Attention

DeFi Application Boom Period

• There are over 300 active projects on the chain now.
• TVL (Total Value Locked) stabilizes at the level of 1 billion USD
• Optimism has become the second largest Layer 2 solution, second only to Arbitrum.

Direction of Institutional Layout

• Coinbase directly builds the Base chain based on OP
• Ecosystem projects like ENS and Uniswap are migrating.
• It is explained that the second layer track has been recognized by the mainstream.

Be Aware of Risks

The price of the currency fluctuates greatly

• Cryptocurrencies themselves are high-risk assets.
• OP may experience a price fluctuation of 30%+ in 2024.

Discussion on Layer 2 Security

• There is a theoretical risk of code vulnerabilities
• But currently, the mainstream second layers have been audited multiple times.

Increased Competition

• Arbitrum, Polygon, etc. are also competing for the market.
• OP needs to continuously innovate to maintain its position.

Summary

Optimism is essentially a practical solution to Ethereum's bottleneck, not just a speculative concept. If you are optimistic about the long-term development of the Ethereum ecosystem, the investment logic of OP makes sense. However, the prerequisite is to prepare yourself psychologically — no matter how secure a project is in the crypto space, it cannot change the inherent risk characteristics of crypto assets.